When to Close Your Credit Cards (Yes, Sometimes It Actually Makes Sense)

Sep 10, 2012 | Credit

By now, most of us have heard that we should keep our credit cards open and that closing them can lower our credit scores. We often refuse to close any existing credit cards for fear we will wreak havoc on our credit. However, sometimes closing your credit cards can actually be a good idea. Here are a few reasons why:

You suspect someone might use the credit card in a less-than-upfront way- For example, suppose you agreed to a monthly gym membership, and although you canceled months ago, the gym continues to charge you the fee anyway. Or, maybe your teenage daughter has your credit card number and you’ve noticed some ‘interesting’ department store charges of late.

Perhaps you are getting divorced and have a joint account with your ex. You’ll want to close that credit card, since you are liable for that debt even if the divorce papers say otherwise. Legally, the credit card companies can look to both parties on the account for the amount due.

Another situation where you may want to close your credit card is if you notice any highly suspicious behavior when you use it. If you fear you may be a target for identity theft, it might be worth it to close the account and protect yourself from fraudulent activity.

The temptation is just too great- Everyone has his or her weaknesses. If your credit cards scream at you every time you open your wallet, perhaps not having them readily available (or available at all) is worth the change in your credit from closing them.

To use the well-known MasterCard slogan, sometimes:

Closing Your Credit Cards = A Ding in Your Credit

The Empowerment that Comes From Taking Control of Your Finances = Priceless

The card has an annual fee or high interest rate – If you call to close a credit card, you can often get the credit card company to waive the annual fee. (As an aside, credit card companies often also waive late fees as long as the late payments are isolated incidents.) Remember, you are choosing to receive a line of credit from the lender. If they won’t take off the annual fee or lower your rate, while you will still owe the remaining balance, the choice to continue using the card is yours.

While closing some of your credit cards may affect your credit, so will racking up charges you can’t pay or dealing with unwanted possible side effects of the cards. If you have a number of cards, closing one will have much less of an impact than if you just had one.

While ideally you want a keep your cards open, especially your oldest cards, and pay them off each month, sometimes life doesn’t always operate under a perfect system. If you have weighed the pros and cons and closing the account still makes sense, do so. You hold the power when it comes to your credit, not the lenders or the debt.


This article has been reviewed and approved by Thomas A. Moore, managing attorney Brownstone Law Group, PC. California Bar # 148698. This article is for informational purposes only, does not provide legal advice of any kind or form any type of attorney/client relationship.

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The information contained on this website is not to be construed as legal advice. It is not intended to solicit or form an attorney-client relationship. Debt settlement, debt negotiation or debt resolution programs (the “Program”) are not an offer or promise to lend money and neither they nor Brownstone Law Group, PC. (“BLG”) assume or pay any consumer debt or make monthly payments. BLG is not affiliated with any lending institution, bank, collection agency or collection law firm. Individual Program results may vary and are based on but not limited to the ability of clients to save funds and successfully complete their Program terms and conditions, the amount and type of debts and creditors, history of accounts and financial standing of clients. Past performances of Clients do not guarantee future results for others and BLG does not guarantee that debts enrolled in the Program will be settled at a specific percentage or amount, or that you will be debt free within a specific time period. Not all Clients complete our Program for a variety of reasons including but not limited to an inability to save sufficient funds. The Program may have an adverse impact on Clients credit. Our services may not be available in all states please check with BLG for state eligibility. Please contact a tax professional to discuss potential tax consequences of settling debt. This website and the content of this website has been reviewed and approved by Thomas A. Moore the managing partner of BLG who’s mailing address is PO Box 629, Orange CA 92856-6629. Copyright Brownstone Law Group, PC. All rights reserved. Unauthorized use of the BLG website includes but is not limited to content copying, duplicating or replicating is strictly prohibited. Furthermore, use of this website is subject to the Terms of use.

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